Buyers: What To Know About Different Purchase Options

Since we are in a competitive market, its important to be well versed in your purchase options to ensure you are making the right decision for you and also aren’t overpaying for the property. Typically, the winter months are historically the best months to buy, and where you are least likely to get into a bidding war, however, this is not guaranteed in the South Bay real estate market. 

As a homebuyer, whether first time or not, there are going to be certain aspects about your particular situation you are going to want to take into consideration to make sure you are making the best choice and best offer, so we will explore a few purchase options. 

Contingent On A Sale

In such a competitive market, it is difficult to have an offer accepted that is contingent on the sale of another piece of property. If this is the route you are going, we recommend having the property you need to sell on the market, and fairly along in the escrow process with contingencies removed. This will allow your offer to look as strong as possible to the prospective seller. Another potential option would be to sell your current property and stay in a temporary rental while you are finding another home so you aren’t making a contingent offer. While this option does involve some risk and quite a bit of moving, it definitely makes your offer the strongest. 

All Cash

The South Bay market has seen an increase in all cash buyers in the recent years, considering real estate in the area is a relatively safe investment. If you have the ability to do an all cash offer, this offer is by far the strongest, and potentially, you could not be the highest paying bidder but still end up with the property. Sellers find that buyers with the fewest contingencies and least amount of escrow time to be safer options. 

Conventional Financing

This is your typical route with 20% down, more or less, depending on each individual situation with anywhere between a 30-60 day escrow period. Within this offer, you typically three contingencies, the inspection, appraisal, and loan contingencies. 


FHA loans work best for first time home buyers that want to purchase but have low credit scores or a low down payment. An FHA loan is a federally insured loan which gives new home buyers flexibility. In some instances, you can purchase with just 3.5% down for up to a $650,000 dollar loan. On top of the monthly mortgage payment, you as the borrower has to pay a mortgage insurance to protect the lender from a loss. 

Regardless the type of financing and purchase option you decide to move forward with, we always recommend for our buyers to write a letter to the seller. Buyers typically don’t get the chance to meet the seller face to face, so this is an opportunity to make a strong impression upon the seller, in hopes that they ultimately choose your offer. Within the letter, we recommend writing about how you love home, and a brief background about yourselves. We present the letter in a package along with the offer, a proof of funds for the down payment, and a pre-approval letter. Please contact us for further questions.